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DOL Fiduciary News: May 15, 2017

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All Eyes on Acosta as DOL Rule Clock Winds Down

InsuranceNewsNet; May 12, 2017 

If changes to the Department of Labor fiduciary rule are not made soon, the chances of any concessions go down sharply, industry officials say.

The main thrust of the rule – that anyone working with retirement dollars adhere to a fiduciary standard – is scheduled to take effect June 9. Industry representatives are furiously lobbying the DOL for another delay.

Opponents are pinning their hopes for an 11th hour reprieve from new Labor Secretary Alexander Acosta, who was finally sworn in April 28. While he hasn’t spoken publicly on the fiduciary rule, Acosta wants to freeze the rule permanently, according to an email a Senate aide sent to rule opponents on Tuesday.

That was welcome news to rule opponents.

Watered Down Fiduciary Rule Could Mean More Work for Advisors

Financial Advisor; May 12, 2017

Under the U.S. Department of Labor’s fiduciary rule, financial advisors will have to do more to distinguish themselves as “true” fiduciaries, according to a leading financial commentator and author.

Speaking on Thursday at the 2017 Inside Retirement conference in Dallas, journalist Jane Bryant Quinn told audience members that the rule, likely to pass in a watered down form, will lead to many firms applying the term “fiduciary” to their work, though they may not fully embrace the current rule’s best-interest standards.

“We might end up with a fiduciary rule, but in name only,” said Quinn, an ardent supporter of more stringent standards for retirement advice. “In that situation, we would have true fiduciaries competing with fake fiduciaries, because the SEC is enabling fake fiduciaries.”

Will the fiduciary rule shrink the ever-expanding world of share classes?

InvestmentNews; May 13, 2017 @ 12:01 am

First there was little share class A. Then there were little share classes B and C. Faster than you could say, "The Cat in the Hat," there were little share classes I, N, K, F and Y. Now the fund industry is contemplating unleashing an estimated 3,500 new T shares and "clean" shares — variously called F3 shares by American Funds and P shares by Janus Capital Group.

Unlike many previous share classes, which were meant to appeal primarily to those who sell them, T shares and clean shares are designed to fit the requirements of the Department of Labor's proposed fiduciary rule, which requires advisers to act in a retirement account client's best interests. While T shares and clean shares are different, they could solve important pricing questions for the fund industry — and even shrink the industry's enormous number of share classes.

But the industry is waiting for a final DOL fiduciary rule — and possibly a matching one from the Securities and Exchange Commission — before changing its fee structures. To make matters more complex, it is waiting for new rules from an administration that was elected on a platform of reducing federal regulations.

Merrill Lynch to Halt Broker Recruiting

The Wall Street Journal; May 12, 2017 2:11 p.m. ET

Merrill Lynch will temporarily stop paying top dollar to recruit experienced brokers, according to a person familiar with the matter, the latest brokerage to make changes to how it compensates brokers poached from rivals.

The firm, as it navigates broader changes to its business under the Labor Department’s fiduciary rule, has told some executives that as of June 1 it will no longer offer signing bonuses that typically paid top brokers who join Merrill as much as seven figures, the person said.

Potential recruits who are already being courted by Merrill before the deadline won’t be affected and will still be offered the typical signing bonuses, the person said. But after June 1, a pause on all recruiting will be implemented as the Bank of America Corp.-owned brokerage develops a new incentive package, the person added.

Merrill Lynch will allow IRA commissions in some circumstances under DOL fiduciary rule

InvestmentNews; May 11, 2017 @ 3:02 pm

Merrill Lynch will allow advisers to receive commissions from some transactions in individual retirement accounts under the Department of Labor's fiduciary rule, the company announced Thursday, backing off a hardline position against commissions that the firm's executives laid out last year.

Merrill Lynch had said in October it wouldn't allow new, advised commission-based IRAs following the implementation of the fiduciary rule. Rather, the wirehouse said advisers could only service retirement accounts in a fee-based, advisory capacity.

Athene: DOL rule transition should not affect company's annuity business; Thursday, May 11, 2017 1:51 PM ET

With the Department of Labor's delayed Conflict of Interest Rule set to take effect in about a month, Athene Holding Ltd. does not expect a six-month transition period scheduled to begin in June to materially affect its annuity business, President William Wheeler said.

Athene, a Bermuda-based provider of retirement savings products, continues to make preparations for the new June 9 applicability of the rule, Wheeler said during the company's first-quarter earnings conference call. In early April, Labor delayed the implementation of the fiduciary rule for 60 days in order to provide President Donald Trump's administration with a longer window to examine the ramifications of the measure on millions of Americans seeking financial advice for retirement.

DOL's Acosta likely limited in delaying fiduciary rule’s June 9 implementation date; May 11, 2017

An email from Labor Secretary Alexander Acosta to Sen. Tim Scott, R-SC, leaked to industry opponents of the fiduciary rule by a Scott staffer, said rolling back the rule was Acosta’s top priority, according to reporting on and

The email suggests Acosta is pursuing options that will stop the controversial rule in a way that will “stick.”

The leaked communiqué comes as scores of Republican lawmakers have called for Acosta to further delay the June 9 implementation date of the rule’s impartial conduct standards, which requires advisors on all qualified retirement investment accounts to act in the best interest of investors.

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